Joyce and Parker duel over Kiwisaver

A week on and still no word from Labour’s David Parker on how his self-proclaimed “big tool” will actually work, Associate Finance Minister Steven Joyce says.

“Mr Parker has still not answered the straightforward question of how much KiwiSaver contributions would have to go up for wage and salary earners in order to stop a 1 per cent rise in interest rates for everyone,” Mr Joyce says.

“And then, this morning in an interview, Parker’s leader David Cunliffe added to the confusion by saying he didn’t have any numbers; and then that savings rates won’t go above the 9 per cent they had already announced; and then at the same time claiming that this magical tool would have a very significant effect.

“We have estimated a 1 per cent increase in KiwiSaver contributions is only likely to generate about $400 million of net new savings and it would take roughly $2.5 billion in extra savings to keep the OCR 1 per cent lower.

“To avoid a 1 per cent OCR increase, Labour would need to take another 6 per cent off people’s pay in addition to the 9 per cent they’ve already promised. That equates to a staggering 15 per cent from every worker regardless of how much they earn.

“Mr Parker has to be upfront with New Zealanders, provide some detailed numbers, and show the impact of his scheme on their pay.

“So far all he has done is rabbit on about how it’s all very complicated and that it’s about the magical combination of all his schemes working together. That’s a cop out.

“Let me spell it out very simply for him again. All other things being equal, what rise in KiwiSaver rates would you need to stop a one percent increase in interest rates?

“If he can’t answer that, then this is yet another Labour Party policy that falls over as soon as you get to the fine print.”

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